We are entering almost unprecedented times as internationally speaking, property prices are falling in what were until recently very successful marketplaces, and at the same time, aggressive real estate investor interest is rising.
The latest findings from the likes of Reuters and Knight Frank show that property prices may be falling abroad, whilst at the same time investors are getting active and taking risks on distressed developers and properties.
If you’re a cash buyer with an appetite for risk, the market is probably looking very attractive right now as Knight Frank report crashing prices across the globe, and Reuters report on the private equity companies putting the squeeze on troubled vendors.
The latest Knight Frank Global House Price Index shows that, for the first time in the Index’s history, there has been an overall decline in global prices – they fell 0.3% in the third quarter with over half of the nations examined posting a fall in average real estate values. For the first time this gives us some sort of benchmark and indication of just how widespread the financial crisis is in the housing markets of the world.
Previous property success stories such as Hong Kong and Canada have even reported declines, and of those nations that remained in the black in terms of positive growth, few were returning any impressive results at all. Russia and a handful of Eastern European nations, which all started from a very low base, returned positive growth – as did Cyprus, Italy and Hungary.
At the bottom of the Index is America, and the UK, Norway, Canada and Lithuania reported the largest, fastest falls. Meanwhile, over on Reuters there is an in depth report into the aggressive action that private equity firms are engaged in at the moment as they seek to exploit weak housing markets globally. Spain is one of the first nations to be hit hard by their forceful actions, as increased numbers of developers teeter on the brink of bankruptcy and look around in desperation for a saviour.
Debt-laden developers are going up for sale and private investors are seeking to make hay while the sun has stopped shining on these developers. Construction companies’ assets are being bought up at bargain basement prices by institutional investors – meanwhile for the rest of us there are similarly attractive bargains to be had on a smaller scale from individual vendors. Where prices are falling fast, so vendors are becoming more accommodating in their bid to find a buyer. Therefore, if you’re in the market for a home abroad now is quite possibly the best time to begin actively looking for that bargain property.
Knight Frank’s predictions for 2009 are far from positive, in fact evidently they see many markets worsening – so as property prices continue to fall overseas, so investors will continue to aggressively buy up stock from distressed sellers with a view to holding the asset for the medium to long-term for positive returns.